Now what?

Well, here we go again. Incorrigible, undisciplined, even reckless, families are racking up new levels of debt. Real estate values may be retreating, but interest rates aren’t. The impact is becoming palpable. There will be stark results.

The latest StatsCan numbers show the share of gross income required to service debt is rising once more. Just below its all-time peak of seven years ago, it’s now back to 2008 levels. The apex was 14.9%. Now it’s at 14.2%. Given that’s an average number, it means a lot of people pay less (over half of Canadians have no mortgage) and many families hand over a helluva lot more. And guess where they live?

The Bank of Canada has jacked rates four times in 14 months. Markets are giving heavy odds for another hike next month, and the US Fed is expected to go twice by Christmas. Both banks, it’s believed, will add two more in the first half of 2019. This is thanks to higher GDP growth, full employment in the States, Trumpian protectionism, American tax cuts, a corporate binge and all of the inflation that this brings, including stiffer consumer prices and wage demands. Add in NAFTA – if a deal is reached (and it will happen) – then our central bank has a lot of catching up to do. The Fed, after all, has moved seven times.

So we now owe $2.19 trillion, with about two-thirds of that in the form of mortgages. By the way, Canadians are the most heavily indebted peoples in the G7 group of industrialized nations. That should get your attention. It means higher interest rates, which are a certainty given our relationship with the States, will have a disproportionate impact on family finances, and housing prices.

CIBC economists had something to say about that a few days ago. They pointed out a sea change – the first time in a quarter century that the rate on government bonds is higher than it was five years ago. So? So it means a long-term trend in declining, bottoming, falling, cheaper interest rates is over. The cost of money will continue to normalize. Never again in your lifetime will you see 2% five-year mortgages – and that means peak house is behind us.

Says the bank: “With that trend set to continue, we estimate that 70% of households with five-year fixed rate mortgages outstanding at the beginning of last year will have renewed at a higher rate by the end of 2020.” Yup, and here’s the chart…

This is a startling stat. It’s real evidence of how the rising cost of money is affecting us, plus it suggests what’s coming. Throw the information above in a blender. (a) Canadians owe more than $2 trillion with the greatest debt load in the western world. (b) Debt’s actually increasing again. (c) Interest rates are on an unstoppable trajectory, at least for the next year. (d) Already seven in ten mortgage households are paying more, and have less to spend.

The bank says higher rates will cost Canadians $8 billion more than they are paying now to service their debts. Serious coin. So the economists make the inevitable conclusion: less consumer spending and an impacted housing market will lead to a slower Canadian economy. Add in deficit-riddled governments continuously raising taxes (BC leaps to mind) plus the impact on jobs and small businesses of higher minimum wages (hello Ontario and Alberta), and this is a formula for real estate woes. Given that property prices in the major markets of the GTA and the LM already exceed the financial grasp of average families, and mortgage credit regs have been seriously tightened, what other conclusion is there?

The greatest risk to real estate has always been higher rates. Real estate bubbled when the cost of money collapsed starting in 2009. Now that we’re returning to historic levels, housing turns toxic for the over-leveraged. In turn, the entire market’s affected.

Two years and half a dozen rate increases ago this blog bristled with posters saying the cost of money would never pop. ‘We’d all be screwed then.’ And, ‘the government will never allow it.’

But then I just read in the comment section that Nine Eleven was a hoax and the Great Financial Crisis was deliberate. Maybe it’s time we all shut up.

You know, when nonno herd his sheep back ina da old country, he only need to show the one ina front da way. The rest dey follow. CP24 Hot property(nonnos favorite), newspapers anda da news a media very good at a herd da sheep.

Sometimes a when somebody tink a too much he hurta himself anda da people who listena to him.

Regarding the increase in household debt, one wonders how much of that is due to mortgage renewals at a higher interest rate. One also wonders whether struggling households are playing the money go-round game, where a HELOC or credit card is used to cover costs that the actual net income isn’t covering. Or maybe folks are continuing to yank equity out of houses (if they have any) & using the funds to either pay for actual necessities or for goodies such as vacations, new ‘stuff’ etc. Whatever the reason, debt loads increasing will eventually have a flow on effect & I’ve no doubt that the indebted will not be taking any responsibility for the financial mess they find themselves in. It will be the fault of ‘foreigners’ or government policy or Boomers etc., etc.

And ona more ting a wanna to say to da racist people ona dis place here where everybody right a stuff.

I lika everybody who coma to dis great Canada. I coma wit nutting here over 50 years ago without a change of mootanda and dis great country maka me rich from a da realestata . I am very grateful. Da Asian a people, Iranian people, Russian, Indiano people (no listen to Russell Peters, Italian people lika Indiano people) I lika everybody. I welcome wita opena arms.

I luv how dey pay 30 ,40 and sometimes a 50 time a more for land and a housa dat I buy 30 or 40 years ago. Maka me and many froma da old country lika me very very rich.

Ina fact, i offereto a free case of my homemade a wine and free tiramisu for everybody who buy or rent a place from me.

Hey fellow Nonno! You a righta about da real estata. You come late to dis bella terra. I come just after da seconda guerra mondiale when da real estata was even cheapa. We need to gedda together for some vino and provolone some daya and talka about all da moneta we maka from da real estata!

In 2016, a very good Customer of mine was telling me all the trouble he had getting a mortgage for an “investment property”. Even though he had a “good job”, the bank was really filleting his financial meat and potatoes, something he had not expected. He did end up getting the loan somehow and buying the house (in the GTA).

Now in 2018, this guy’s industry is on the front line for job losses depending on what Trump decides to do with NAFTA and steel tariffs. He is no doubt in a negative equity situation on the “investment property”. I know he does not trust the stock market, so he undoubtedly has zip saved or invested.

Multiple balls in the air right now, and there must be thousands of white knuckled Canadians sh!tting bricks wondering just what the hell is coming down the pipe at them. I guess them to be mostly GTA’ers and GRVD’ers.

9200 US troops in Germany? Why? not enough Germans to police their own country, that they must enlist another country’s loyal fighting force?

This only makes sense once one accepts that there is a global force. Countries remain as an illusion.

“The United States is the largest operator of military bases abroad, with 38 “named bases”[note 1] having active-duty, National Guard, reserve, or civilian personnel as of September 30, 2014. Its largest, in terms of personnel, was Ramstein AB, in Germany, with almost 9,200 personnel.[1][note 2] The Pentagon stated in 2013 that there are “around” 5,000 bases total, with “around” 600 of them overseas.[2]”

Garth, wasnt it you that was telling people 6 months ago to buy real estate in specific areas because that was probably it for the correction?

Maybe if I post this enough itll get by moderator

In areas where there was a 25-30% decline and vendors were desperate, it made sense for those who could afford it and needed to buy to do so. How is that not reasonable and prudent? Stop thinking in black and white. – Garth

#1 wrote: Royal bank recently came out and said that…
_______________________

… yes. There’s a malice! Most good folks in banking, financial services are very, very clear. They’re very clear, … they understand their business model depends on stripping value out of middle- and working-class people’s lives.

Anyway, it’s all part of a “rule by helping.”*) They, the bankers, help you by providing you with pamphlets, information, reports, et al. that make you, unwittingly, to help them!

Best,

F.S.: Calgary, AB.

*) it is a phrase out of Thomas Piketty’s book, Capital in the Twenty-First Century.

And as I have been reporting for some time, our Foreign Direct Investment account has been seriously negative for 20 years and the spread between FDI and FDO seriously widened 3 years ago: http://www.chpc.biz/household-debt.html

Our cost of money is being paid more to manage lifestyle consumption and less to earnings production.

Lol. If u need or want a house just buy it. The prices won’t decline. The horses have left the barn. Interest rates will come down again in 2019 after they realize mistake to increase them and Canadian homes will sky rocket again. Just buy the freakin house and stop reading real estate news.

Hedge fund manager Ray Dalio breaks down the economic cycle as being driven by 3 major forces: productivity growth, the short term debt cycle and the long term debt cycle.

He also has 3 rules of thumb for surviving the cycles:

1. Don’t have debt rise faster than income

2. Don’t have income rise faster than productivity

3. Do all that you can to raise productivity

Let’s see how Canada measures up:

1. Debt / income ratio is the highest of the G7 countries, higher than the U.S. in 2008 and double the U.S. today

2. Productivity growth is essentially flat, and yet minimum wage increases are making Canadian workers uncompetitive.

3. Almost all of the credit created in Canada is put towards consumption and unproductive sectors like real estate. 97% of businesses in Canada are small or medium size and yet they are starved for credit to expand and invest in technology to increase productivity.

In summary, Canada is a country of exceptionally unproductive workers who borrow exorbitantly relative to incomes to spend on luxuries rather investments in the future. And unlike the U.S., Europe and Japan, we haven’t had a deleveraging since the Great Depression.

“We are seeing some 40% off peak prices hitting in Richmond Hill in August. One young family bought a home for $1,115,000 and now their neighbours who own the same home are getting $650-$730,000. Historic Net Wealth devastation.”

Eight billion in less disposable consumer income annually due to higher mortgage service costs sounds like a lot to me. You’ve never done retail business, have you? – Garth

*********************************
It does sound like a lot. But I was surprised it was not higher given 2,000 billion in debt. I just like to put numbers in context. I like percentages.

Since you asked, I’ve been exposed to the retail or consumer service business world all my life. I stood behind a cash register for the first time by the time I was ten years old. The Motel business in question is still operated by my family in Cape Breton and awaits your visit where you will, like all guests, be warmly greeted.
Well, $8 billion goes a ways in Cape Breton. – Garth

#1 Cottingham a bargian on 09.16.18 at 3:56 pm
Royal bank recently came out and said that those waiting for a correction in Toronto real estate prices will be disappointed . This blogs author believes otherwise.

Toss a coin and take your pick people
_____________________________

Toss a coin and take your pick????

If your advice is to invest in real estate, excellent. by all means. And anyone who wishes to follow your most excellent advice is free to do so.

But then I just read in the comment section that Nine Eleven was a hoax and the Great Financial Crisis was deliberate. Maybe it’s time we all shut up.

———————-
“People start being interested in something because it’s going up, not because they understand it or anything else. But the guy next door, who they know is dumber than they are, is getting rich and they aren’t,”

It’s time to let people figure it out for themselves. Investors are not ready to listen to the fact they are on their own. There may not be another buyer for the home they bought at the price they were expecting.

It seems like they don’t know how to stop in the GTA. They see prices drastically decreasing but they keep building homes for investors who don’t have the money to pay the builder in full because their agreements were based on mortgage rates and lending practices that don’t exist anymore. The investors and speculators I have met, don’t have a plan B and just talk gibberish when you show them sold data of the homes in their area falling in value.

The article below was published in the Toronto Star, I expected better of them:

“I’m subsidizing the houses by $1,000 a month,” says Johnson. “I’m short-term cash poor, but in 20 years each of my kids will have a house and I can move into one of their basements.

I think the kids would have preferred if that money goes into a TFSA or RRSP, so that when they are older they can use it to buy a home in a city they want to live in rather than where their mother tells them they should live.

The public doesn’t have access to the “real” data coming out of America. The fabrication since Trump was elected is well beyond belief. For anyone who doesn’t believe this look at the 30 year treasury yield in America. How long will they keep on fabricating most or all the data? If America doesn’t kill their own currency we could see mortgage rates in Canada at near zero or .25 or .50 percent for a 5 year term post 2020.

True that! And the island could use your business. I’d have to recommend for you a motorcycle trip on the Cabot Trail. Even by car, the part starting at St. Ann’s (I’d skip the Englishtown ferry route) and going to Ingonish, I found very nice when I drove it this past Summer. The speed limit was max 80 km which at times felt like more of a dare than a limitation.

What say you is a good budget estimate per month for a 6 month sojourn around Vietnam -> Thailand areas?

Local food is part of the experience and mid-level hotel is normal for us.

Cheers, R
……………………………………..

Your biggest barrier will be language. English and French are spoken there but not widely. Rents vary widely by location. You can negotiate monthly rates with hotels almost everywhere. You want secure and comfortable in a good area. Try the place for a few nights and see if the dogs and roosters and kareoke keep u up all night. Walk the streets. If u budget $1000 CAD per month for rent and electric you will be ok in mid priced hotels and might even pay half that, depends on your required safety,comfort level, and location. Local cuisine can be ok but refrigeration of food can be iffy. Always drink bottled water, ask for no ice in your drinks. Spoiled meat can be dangerous, they don’t like to throw it out. Places with high turnovers are best since the food does not sit around for very long. Budget $500 CAD per month per person for food and u should be ok eating in restaurants, maybe half that if you cook.You may even spend less depending on your tastes. Say $300 CAD per month if like to get out and about in taxis, half that if u can endure the local jeepneys and tuktuks. Don’t get seriously ill, it can be expensive and travel health insurance is very costly and can be hard to use. Bring any meds u think u might need, even aspirin and ibuprofen.Have an exit plan and return ticket and a good emergency fund. Have several atm and credit cards to access cash. Always go to a bank that is open to use the atm, don’t use free standing machines in case of problems.Have lots of cash available cuz there are power outages and the atms do go offline and sometimes run out of cash. Let your bank know you are travelling or u may not be able to access your cash. Do not trust anyone ! Good luck.

#27 Alessio on 09.16.18 at 5:37 pm
Lol. If u need or want a house just buy it. The prices won’t decline. The horses have left the barn. Interest rates will come down again in 2019 after they realize mistake to increase them and Canadian homes will sky rocket again. Just buy the freakin house and stop reading real estate news.
___________________________________

More financial illiterate advice on full display. By all means, buy buy buy.

Interest rates will never again in our lifetime be as low as they were. Housing will be half the cost it is now in a few short years. Canadians, particularly RE types with skin in the game, believe that once prices go up they don’t come down again. The underlying economics don’t work that way. Prices will adjust to what locals can afford and are willing to spend. With household debt where it is and sky high prices for housing in place, RE is not affordable. If prices don’t drop to what people can afford, there will be no sales – kind of like what is happening now. They will sit and sit and sit, until prices retract and align for people who want to buy and can afford it.

Sarah Larbi, a 33-year-old Toronto native who owns six houses with her common-law partner — one in Oakville, where the couple lives, and five in Brantford, which she rents out for $1,300 to $1,500 a month. She has been saving aggressively for several years to amass what is essentially a suburban empire.

“Johnson, a single mother, was doing contract work after losing her full-time marketing job during the 2008-09 Great Recession, and was also concerned she wouldn’t have finances — or an inheritance — to help her kids.
She used the equity in her own home to buy houses for each of her preteen children. She did it, despite being warned against it by two financial advisers.”
“I’m subsidizing the houses by $1,000 a month,” says Johnson. I’m short-term cash poor, but in 20 years each of my kids will have a house and I can move into one of their basements.”

Mexico got a deal under the threat of 20% or so auto tariffs if they do not comply with comparable US labor standards and hourly rates. In effect, removing the advantage of making vehicles there.

Some deal.

More like Trump’s: my way or the highway.

Canadians talk as if the US should be charitable or owe it to Canada.

Trump wants US jobs and not Canadian jobs.

Simple as that.

Thus far, he has delivered on his economic campaign promises. Killing NAFTA was one of them.

—-
I dunno, man. Now that Trump (aka He Who Smelt It)
will be adding those additional tariffs on China (and incurring the retaliation) the American economy will be under a lot more pressure. If he adds auto tariffs to that it will hurt them as much if not more than it does us.

If Trump was smart (he’s not) he would have staggered his trade disputes instead of doing them all at once.

My layman’s guess is the status quo holds. Congress will be a lot less forgiving after November.

Before President Donald Trump nominated Brett Kavanaugh to the Supreme Court, he had a lot of debt. In May 2017, he reported owing between $60,004 and $200,000 on three credit cards and a loan against his retirement account. By the time Trump nominated him to the high court in July 2018, those debts had vanished. Overall, his reported income and assets didn’t seem sufficient to pay off all that debt while maintaining his upper-class lifestyle: an expensive house in an exclusive suburban neighborhood, two kids in a $10,500-a-year private school, and a membership in a posh country club reported to charge $92,000 in initiation fees. His financial disclosure forms have raised more questions than they’ve answered, leading to speculation about whether he’s had a private benefactor and what sorts of conflicts that relationship might entail.

No other recent Supreme Court nominee has come before the Senate with so many unanswered questions regarding finances. That’s partly because many of Kavanaugh’s predecessors were a lot richer than he is. Chief Justice John Roberts, for instance, had been making $1 million a year in private practice before joining the DC Circuit as a judge. The poorer nominees had debts, but explainable ones, such as the $15,000 Sonia Sotomayor owed to her dentist. Neil Gorsuch came the closest to financial scandal when he disclosed that he owned a mountain fishing lodge in Colorado with two men who are top deputies to the billionaire Philip F. Anschutz, who had championed Gorsuch’s nomination.

I feel so bad for people. A lot of Canadians are already cash strapped and hand to mouth. They mostly shop from dollar stores and walmart clothes. Its very easy to spot a Canadian from an American just from their get up. I hope after Trump gets his way, they can at least get cheaper dairy. Oh I heard Canada may even get a duty free limit increase from a pathetic $20 to may be $200 or more. Hey if that happens do all your shopping from U.S if you live close by. I really dont know how can people survive on such low salaries (compared to U.S) expensive stuff and 13% taxes. Kudos to everyone.

#32 Victor V on 09.16.18 at 5:58 pm
“We are seeing some 40% off peak prices hitting in Richmond Hill in August. One young family bought a home for $1,115,000 and now their neighbours who own the same home are getting $650-$730,000. Historic Net Wealth devastation.”

With so much debt in the system, does anyone really think that inflation is even possible? The minute any inflation actually does appear, lenders will tighten up credit, and wham, any such inflation will disappear overnight.

Now, the time to be afraid of impending inflation is in an economy that is not indebted. Because in such a scenario, interest rates and spreads, as set by the lenders in the marketplace are useless in modulating consumer spending. But so long as consumers are so pickled in debt, inflation, let alone hyperinflation, is basically impossible to any meaningful extent. With RE clearly declining nationwide, there’s a pretty good argument to be made that the Bank of Canada is ignoring the risks of deflation as consumer credit expansion slows, and with it, consumer spending.

The technology that is behind facial recognition can be boosted to model speaking personalities. Integrating the speaking with the speech, it can create a video of a famous person saying what ever the creator of the video wants. This AI technology could be a serious threat to democratic societies. I am sure there are “software” engineers in Russia, China and North Korea perfecting this technology. Political strategists in these nation states are most likely thinking how best to deploy it in the western elections.

Re: interest rates. The real questions are how high will they go and how fast will they get there ? ….they may get frozen or go down again too. Methinks as low as possible for as long as possible. Too much pain all around if they go up too high or too fast.

#53 richmond hill townhouse on 09.16.18 at 8:58 pm
#32 Victor V on 09.16.18 at 5:58 pm
“We are seeing some 40% off peak prices hitting in Richmond Hill in August. One young family bought a home for $1,115,000 and now their neighbours who own the same home are getting $650-$730,000. Historic Net Wealth devastation.”

Garth, long time no comment from me but a regular reader. This was on our Aussie 60mins last night, thought it might be of interest.
Bricks and slaughter: Part one “It’s no secret that Australia is experiencing a downturn in the property market. But for Aussies who own their own home or have a mortgage, there’s worse news. Many believe calling it a downturn is foolishly optimistic – the slump we are in is more like falling off a cliff”.https://www.9now.com.au/60-minutes/2018/extras
Part 2

All the prognosticators here need to be more aware of when and how often they use the words “always” and “never”. The truth is we don’t know and can’t know the future. Trade wars, hot wars, black swans – the list is endless. I never would have guessed that the US Border security would come out and threaten every investor in marijuana stocks, but they went ahead and did it. So there goes the entire CAD investment community getting banned from US entry for life.

Anyways, my whole point is we don’t know, we can’t know, and the best we can do is reduce our risk exposure as best we can. Cue the Garth.

And mainly I wanted to post this – an interesting side read in Alberta’s most expensive place to live.

59 Victor V on 09.16.18 at 9:28 pm
#53 richmond hill townhouse on 09.16.18 at 8:58 pm
#32 Victor V on 09.16.18 at 5:58 pm
“We are seeing some 40% off peak prices hitting in Richmond Hill in August. One young family bought a home for $1,115,000 and now their neighbours who own the same home are getting $650-$730,000. Historic Net Wealth devastation.”

—————————-
No doubt prices in RH have fallen from tbekr peak. But I want to see the exact example of someone e paying 1.1 for a townhouse and the neighbor paying 650k. Otherwise it’s just as useless as those cherry picked examples last week.

Great advice, the only thing I’d add to “always drink bottled water” is to always drink bottled water that has a top you’ve unsealed yourself – empty water bottles have a habit of refilling themselves and the tops twisting back on in a lot of places…

10 years ago this week humanity came uncomfortably close to economic armageddon. A return to a system that would make Game of Thrones loving basement dwelling Millennials wet themselves. The fact that nobody has been arrested is a fairly strong argument for testing the Guillotines on the lawmakers to ensure efficient and humane operation before scaling the system up for the bankers and puppet politicians

The liberals are very excited to blow the NAFTA deal. They are marxist socialists, and I suspect they will use the opportunity to bring in a far more socialist system as industry starts to flee to the US.

#67 Peter McLean on 09.16.18 at 10:32 pmShould I pay off some extra of my mortgage, while rates are low before I renew with a higher rate?
**************************
With what money? Are you thinking about cashing in on investments that are making 5-10% in order to pay down debt at 3%? Then probably not.

Is it money that you are just going to blow on something else? Then maybe yes…unless you can sock it away in your TFSA and earn more than mortgage interest rates are right now.

The site reminds me of ohmyhome (RIP) in terms of ease of use. TREB is paranoid and going after everyone for sold data, I don’t mind mentioning the website since I think they will be shut down soon.

Ross Kay has been giving accurate predictions about the Canadian housing market for several years now, for FREE. I think people weren’t ready to listen to him because they wanted the party to keep going. Most people are still not ready to listen, but it’s nice to have everything online these days – no one can say he didn’t warn you.

Now that billions, Cabot trail, Cape Breton is mentioned, I am wonderin what it would take for LCBO to bring in GLYNNEVAN Cabot Triple Barrelled Canadian Rye, awatd winning Canadian rye to Ontario?
pft buck a beer…

A: One of the potential issues with the Canadian banks is that the risk weights that are given to mortgages are exceptionally low and that’s because there have been no losses in Canada for 25, 30 years. So for example, if you look at the larger Canadian banks, you’ll see that they assume the risk rates are in the single digits — and to get to that number they assume 85 per cent of the mortgages that they have that are not government-guaranteed will produce losses of 20 basis points or less per year.

“I dunno, man. Now that Trump (aka He Who Smelt It)
will be adding those additional tariffs on China (and incurring the retaliation) the American economy will be under a lot more pressure.”

More pressure on the USA economy?

The goal of the tariffs on China is to reduce the USA’s multi-billion trade deficit with China which weighs against its GDP. He wants China to open up the China markets to buying US goods which are hugely tariffed in China.

What’s wrong with that? Serious question.

Please explain why you believe that the US not being able to sell as much to China as China sells to the USA, to the tune of billions of dollars of trade imbalance, is fair?

“feel so bad for people. A lot of Canadians are already cash strapped and hand to mouth. They mostly shop from dollar stores and walmart clothes.”

What universe do you live in? 63% of Americans can’t afford a measly $1000 emergency hospital visit and a paltry $500 car repair…. that’s almost 2/3 of America. As a Canadian snow bird often remarks to me, the poverty he sees en route to Florida every year is not found anywhere in Canada and he has driven from coast to coast. Cross the border from Windsor to Detroit and the contrast is vivid. What are you on cowboy?

#83 NoName on 09.17.18 at 5:06 am
Now that billions, Cabot trail, Cape Breton is mentioned, I am wonderin what it would take for LCBO to bring in GLYNNEVAN Cabot Triple Barrelled Canadian Rye, awatd winning Canadian rye to Ontario?
pft buck a beer…
_____

Probably $35-40.00 / 26’er

The cost of spirits in Ontario has just recently jumped into the “just plain stupid” zone.

If Ontario keeps this up, there will be more money in bootlegging whiskey than selling weed…

#85 Evangeline on 09.17.18 at 6:35 am
Why would he want that?
—————————————————————
He’s seems a bit shaky on direct cause and effect, secondary knock-on impacts like damaging large segments of his biggest trading partner’s economy and what that means to exporters @home really don’t make it into the calculation…

You need to remember that he’s a zero sum kinda guy who really doesn’t seem to understand partnerships that exist for more then eventually screwing your partner over to “win”…

“feel so bad for people. A lot of Canadians are already cash strapped and hand to mouth. They mostly shop from dollar stores and walmart clothes.”

What universe do you live in? 63% of Americans can’t afford a measly $1000 emergency hospital visit and a paltry $500 car repair…. that’s almost 2/3 of America. As a Canadian snow bird often remarks to me, the poverty he sees en route to Florida every year is not found anywhere in Canada and he has driven from coast to coast. Cross the border from Windsor to Detroit and the contrast is vivid. What are you on cowboy?

“I dunno, man. Now that Trump (aka He Who Smelt It)
will be adding those additional tariffs on China (and incurring the retaliation) the American economy will be under a lot more pressure.”

More pressure on the USA economy?

The goal of the tariffs on China is to reduce the USA’s multi-billion trade deficit with China which weighs against its GDP. He wants China to open up the China markets to buying US goods which are hugely tariffed in China.

What’s wrong with that? Serious question.

Please explain why you believe that the US not being able to sell as much to China as China sells to the USA, to the tune of billions of dollars of trade imbalance, is fair?
____________________________
China owns a substantial amount of US debt.
I wonder if they start calling it in if trump puts more tariffs on them.

Garth, some of us think you have to be one brainwashed boomer to call 9/11 a hoax, it was real but it was done with planned with internal approval. It’s difficult to grasp how someone as reasonable as you believes armed cave dwellers armed with box cutters flew planes at perfect angles to evaporate steel, and free fall steel structures while dropping passports everywhere was the real story.

You must be seriously dillusional to buy the official story, or you are part of the big club, you were in the highest level of politics and I’m reasonably confident you don’t get up there without being thier guy.

Same goes for the financial system collapse and bailouts… You have to be seriously dillusional to think that the deregulation of the Glass-Steagall Act wasn’t a delibrate move to have the lower intelligent classes buy homes they can’t afford, with all the financial instruments that came along with it to create a mother of all bubbles. Then bail themselves out with tax payer money… Too big to fail you see?

I suppose knowing human nature, you don’t have to be in the big club. Once you lived you entire life with a specific set of beliefs and dedicated a good portion of your life work supporting the system. It’s too difficult to admit to yourself it was all a lie.. the mind moves to protect itself against cognitive dissonance and dissociation.

#87 Evangeline on 09.17.18 at 7:08 am
“The goal of the tariffs on China is to reduce the USA’s multi-billion trade deficit with China which weighs against its GDP. He wants China to open up the China markets to buying US goods which are hugely tariffed in China.”

Here’s what Adam Smith had to say about trade deficits: “Nothing, however, can be more absurd than this whole doctrine of the balance of trade, upon which, not only these restraints, but almost all the other regulations of commerce are founded. When two places trade with one another, this [absurd] doctrine supposes that, if the balance be even, neither of them either loses or gains; but if it leans in any degree to one side, that one of them loses and the other gains in proportion to its declension from the exact equilibrium.” (Adam Smith, The Wealth of Nations, 1776, book IV, ch. iii, part ii.)

Too many unanswered questions about 9/11. Why wasn’t an investigation done by searching for plane wreckage, like happens in every other plane crash, like MH317, instead of a rushed cleanup by contractors that had tie’s to politicians? Supposedly the “Black boxes” of the 2 that hit the towers were destroyed, but they found one of the highjackers passports in perfect condition, how does a passport survive an explosion that destroys the black box of a commercial airliner? Where is the wreckage of the planes that went down in Pennsylvania? If the conspiracy theories are wrong, why doesn’t the government release one of the video’s it confiscated showing a plane hitting the pentagon and put the theories to rest? look at what happened on the stock market leading up to 9/11, put’s on american airlines going up like 4x or more, then after the “attack” millions in puts that were never claimed. Why would someone not claim millions if it’s legit? How did building 7 fall at an accelerated rate, inside it’s own footprint when it didn’t get hit by a plane and there were other buildings, closer, that got more damage and didn’t fall? Why did Silverstien buy an insurance policy just before the ‘attack’ specifically outlining the buildings getting hit by a plane? Why is there a society of engineers (engineers for 9/11 truth) in the US that say it’s impossible for the buildings to collapse from this kind of damage, planes hitting them? Why is there a society of pilots (Pilots for 9/11 truth) that say it’s impossible to fly highjacked airplanes around inside US airspace for 45 minutes plus, and not at least be escorted by fighters? these are educated people, not the tin foil hat high school dropout conspiracy crowd. Why did the US invade 2 countries after the “attack” that had nothing to do with it and there’s still never been any evidence of those countries involvement?. Just sayin, if someone could give a logical answer to the questions, maybe it wouldn’t look like an inside job or conspiracy.

#81 Fortune500 on 09.17.18 at 4:18 am
Looks like the Libertarian Party is interested in merging with Maxime’s new party. Just when the MSM had Mad Max defeated
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Take 10 Libertarians and get 10 different takes on what they actually want / don’t like that impacts their on their “free will” though not a single one would refuse a tax-funded ambulance, on a tax-funded road to a tax-funded hospital to be seen by tax-funded emergency room doctor…

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Thanks bungol is a much better site. It’s true people did pay 1.1 for a townhouse in RH. WOW. It looks like the average price now is 850 not 650 though. Those prices are a lot higher than Oakville. I wonder why the hell they are so high.

We may not see the exact same crises scenario as in ’08. But we will see big changes in the way of life in North America. China and Russia have started their own reserve bank along with a market trading oil in Yuan, the petro Yuan that nobody in the west is talking about and are in complete denial of. This along with countries jumping ship and dumping US dollars, forcing the US to accept back the trillions they’ve printed over the last 50 years or more. Losing reserve currency status on the world scene will crash the dollar, this in combination with high oil prices now that there’s competition with the US dollar oil market will make oil more expensive for the US and now that they can’t just print more of their crappy fiat currency, they won’t be able to afford all the military bases overseas, then they’ll lose control of shipping routes, losing control of where the oil goes, witch is getting short on supply and will only get worse. Something else will have to take reserve currency status and the logical choice now would be SDR’s (Already being used by world community), once everyone starts using them for reserve currency, we’ll see a world union type system, likely run by the UN since the US will lose their empire and try to keep control through the UN, but forced to share now that they’ve lost financial domination that has always benefited them at the cost of all other nations. Just a crazy prediction about who will take control. But we will see the US dollar replaced and big changes on the world scene, nobody can deny that. Big investment has already moved to India/Asia since they’re the next rising power/economy. Just look at all the western manufacturing already there. Next 5-10 years will be interesting

“I dunno, man. Now that Trump (aka He Who Smelt It)
will be adding those additional tariffs on China (and incurring the retaliation) the American economy will be under a lot more pressure.”

More pressure on the USA economy?

The goal of the tariffs on China is to reduce the USA’s multi-billion trade deficit with China which weighs against its GDP. He wants China to open up the China markets to buying US goods which are hugely tariffed in China.

What’s wrong with that? Serious question.

Please explain why you believe that the US not being able to sell as much to China as China sells to the USA, to the tune of billions of dollars of trade imbalance, is fair?

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I wasn’t commenting on the relative fairness of the trade arrangement, only remarking on the realpolitik that the US now has to deal with massive and consequential retaliation from China (and others) in addition to our potential retaliation.

If our NAFTA dispute was happening in a vacuum perhaps the US might have more leverage, but as things stand a full-on trade war with Canada in this environment would do serious damage to the economies of many states- perhaps tipping them into recession- specifically those that made the difference for Trump in the last election.

“The bank says higher rates will cost Canadians $8 billion more than they are paying now to service their debts. Serious coin. So the economists make the inevitable conclusion: less consumer spending.”

More financial illiterate advice on full display. By all means, buy buy buy.

Interest rates will never again in our lifetime be as low as they were. Housing will be half the cost it is now in a few short years. Canadians, particularly RE types with skin in the game, believe that once prices go up they don’t come down again. The underlying economics don’t work that way. Prices will adjust to what locals can afford and are willing to spend. With household debt where it is and sky high prices for housing in place, RE is not affordable. If prices don’t drop to what people can afford, there will be no sales – kind of like what is happening now. They will sit and sit and sit, until prices retract and align for people who want to buy and can afford it.
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I’ve been following the local MLS over the summer as a potential “move up” buyer in the near future.

All I can say is there is almost nothing worth looking at.

Someone in my shoes who is in no rush whatsoever is just going to sit and wait. Why not? I’ve already got a place to live, and prices will only go down from here. The longer I wait; the better the deals become.

Now if you scroll to the bottom of the page of those links and click on the tab ‘Sold Records’, you are going to find a lot of mid to low 600k homes sold in the area within a 250 metres radius of the sold homes you listed in the past 90 days.

When these people renew their mortgages at their bank/private lender, and their lenders realize prices have fallen back to 2016 levels, do you think they will get the best mortgage rates if their loan to value is high? Or are their lenders going to take advantage of them and raise their mortgage rates because they don’t qualify to go to another lender to get a better rate.

Maybe they would have used that extra 100k -150k to invest in retirement plans, RESPs for the kids, live in a better quality house, live closer to Toronto as the monthly GoTrain fare is $428.40 to get to downtown Toronto from Newmarket.

You are right about sold data, it’s great to get transparent data, even better to get the price history for homes on those streets.

Compared to 52 Lewis Drive:
46 Lewis Drive which originally tried to sell for 898k 14 months ago but settled for $711k.

Compared to 86 Gladman Ave
57 Gladman which sold for 1.07 million in March 2017 and now sits on a street with homes such as 86 Gladman that sold for 300k less.

Compared to 60 Millard Ave.
65 Millard which is currently listed for 715k which is a nicer flip than the 60 Millard or 93 Millard which is asking for 100k less than 60 Millard sold for.

All of these searches take minutes to complete. What will happen after October 22, 2018 (TREB compliance deadline) when this information becomes readily available like in the US?

Benchmark home prices fell by 0.6 per cent on the month, the biggest decline since August 2017. That was driven by Vancouver, where prices dropped 1.4 per cent, the biggest one-month fall since 2008. Toronto home prices were down 0.3 per cent in August.

The same could be said about Brampton, their market is still seeing prices increase even though cities with better transit (can take up to 2 hours one-way to get to downtown Toronto) and access to highways are selling for less.

Kids, Rent to Own schemes are to you the way reverse mortgages are to oldsters and Pay Day loans are to everyone. Any sane “seller/landlord” is going to have terms in one of these types of agreements that gives them all your “investment” to date the minute you need to alter terms, decide not to buy or miss documented dates no matter how much ownership-like care you put into the place… Don’t enter into one w/o at least strong legal representation and a clear head…

Garth, with all due respect.. of course we understand that you are the gatekeeper of what gets posted in your comments, and you are proactively editing them to maintain the maturity of the dialogue.
At the same time, your guidelines indicate “Respectful, wide-ranging discussion on the topic of the posting is encouraged, and will not be censored.”, and you have raised this topic yourself – it IS ‘on topic’.

You are a private citizen now, but as a former member of Cabinet and the Privy Council, it’s fair to say you and all former leaders carry some lifelong responsibility (even if unwritten), to our national security. You are connected to higher echelons of security, or can easily be.

For you to dismiss a poster (#95 Danbg on 09.17.18 at 9:05 am) with the comment of “Get help, dude” is not productive to our national security. It treats his points as a symptom of mental illness, when he’s raising valid facts.

Controlled demolition is the only plausible explanation for how this building came down in the fashion that it did at freefall acceleration. How could that have been orchestrated? This tower (47 stories) happened at 5:20pm on 11 Sept 2001.

The video and chemical evidence points to 3 towers coming down in controlled demolitions. That paints a very very dark story, which I don’t want to be true, but reluctantly have to accept as being true.

It takes work to get through the cognitive dissonance.

The story peddled by the US government is easy to accept.
The version of the course of events suggested by the evidence of Controlled Demolition is much darker, and harder to accept.

“China owns a substantial amount of US debt.
I wonder if they start calling it in if trump puts more tariffs on them.”

The quid pro quo that has been in place for some time between the USA and China is simple. The USA would buy Chinese products and China would buy US debt so the USA could buy Chinese products. Seems someone forgot to give Mr. Trump the memo….

ETFs also make flash crashes, which are becoming more common, worse. Evaluating big US flash crashes in 2010 and 2015, the Securities and Exchange Commission found that ETFs experienced “more severe volatility” than ordinary stocks.

rinse lather and repeat
Research by the IMF shows that deregulation usually marks the start of a crisis. For 300 years, there has been a perpetual cycle of booms followed by deregulation, crises, and re-regulation.

Between 1970 and 2011, there have been 147 banking crises, 218 currency crises, and 66 sovereign crises

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a single trader
Ten years after Lehman’s collapse, a massive trader default in Norway …https://qz.com/…/ten-years-after-lehmans-collapse-a-massive-trader-default-in-norway…

3 days ago – A wrong-way bet by one of Norway’s most successful traders has caused a stunning default, ripping through safeguards at the exchange …

Einar Aas, a veteran derivatives trader who made large bets on the power market, left a 114 million euro hole in the fund that Nasdaq and commodities companies who are part of the Nasdaq clearing house are obliged to cover. (reuters)

China owns a substantial amount of US debt.
I wonder if they start calling it in if trump puts more tariffs on them.
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China’s US debt is in the form of US Treasurys willingly (and necessarily) purchased by China. All China can do is try to sell said Treasuries.

If China dumps its US debt (sells it’s Treasurys) en-masse, it would tank the value of their own holdings – and simultaneously tank the Yuan as it is essentially fixed to the US dollar at 6-7:1.

So the short answer is No. Not until China lets its currency float on the open market and lets its Citizens and businesses own foreign currencies and equities.

Every person and every business in China that needs US dollars HAS to go to the People’s Bank of China to get them. Until this changes, China will need to own piles of US Treasuries (that they sell for dollars) in ever greater quantities.

AMP has admitted to charging $1.3m in premiums for life insurance to more than 4,600 superannuation customers it knew had died, and admits the number of cases could be higher.

The royal commission heard on Monday AMP decided to investigate the matter in April after it heard Commonwealth Bank admit to the commission that its own financial advisers had been charging dead clients for financial advice…

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The Clock of the Long Now, also called the 10,000-year clock, is a mechanical clock under construction, that is designed to keep time for 10,000 years.

a project that the Amazon CEO has invested $42 million in (along with a hollowed-out mountain in Texas that Bezos intends for a Blue Origin spaceport), with the goal of building a mechanical clock that will run for 10 millennia.
western sweat shop?
“Amazon is one of the biggest employers of those who receive food stamps in the United States, with nearly one in three Amazon workers on food stamps in Arizona and one in 10 in Pennsylvania and Ohio.”

Of course you’re not responsible for it!!
There isn’t a lead with any evidence as to who is. That part remains unknown.

However, all people with Influence who are connected to security operations and world leadership as you are within a phone call or two, and who keep their head in the sand with respect to evidence and dismissing those who raise fair evidence as suffering from mental illness, I’d say you are a part of the web of perpetuating the cover-up. In your case, unwittingly.

Millions have died in the middle east “in the name of 9/11”, under false pretenses. Canada remains engaged in missions in the middle east which are all 9/11 fallout.

I will lay off this topic now, I’ve said my bit. You have a blog and business to run. I have to get back to my day job.

#114, #116 Jim Brooks, Thanks, good points.
#117 Factsnotfiction, thank you, and again, good comment.
If there’s one thing I learned from 9/11, it’s that our world can change in a split second. We live in an ever changing world that will be nothing like the climate our parents lived in. What worked then, won’t work for us. If the same strategies are working for some currently, they won’t for long. We’ll see fast and big changes happen in our lifetimes and have no control over them when they do, just like in back in ’01

#94 IHCTD9 – Hasn’t China been using their paper greenback money to buy gold for quite a few years now? This is a good plan, then they can weather a US dollar crash

That Garth reads a call for openness to dissent as an attribution of responsibility for 9/11 attests to his poor epistemic character. For the reader in me who has been trying to weigh his opinions with optimism against others, that throws quite a heavy stone on the skepticism side of the scale.

I agree CEW9; unknown, unknown’s can only be combated with balance. Also – interesting read about the campers in Canmore. I didn’t know it had progressed this far, but it makes sense given the wealth disparity.

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#65 CEW9

Anyways, my whole point is we don’t know, we can’t know, and the best we can do is reduce our risk exposure as best we can. Cue the Garth.

And mainly I wanted to post this – an interesting side read in Alberta’s most expensive place to live.

“Many new jobs may be less secure than in the past, as businesses are increasingly turning to contractors and freelancers, the Swiss foundation said. It warned there’s a significant gap between the skills workers currently have and those that may be required for future new roles.

It estimates more than half of employees at large companies would need significant retraining in order to take advantage of new opportunities created by digital technology. But it said half of all companies plan retraining only for “key roles,” and only one-third say they plan any retraining for at-risk workers.”

These companies, controlled by the older generations, have very little interest really in retraining or helping younger, vulnerable workers.

Just remember: we still vote. No machine will be taking that away any time soon.

And there’s more of us now than Boomers. No way will millennials put up with this outrage that the corporate status quo born in the 1950s wants to put upon us.

Huge political changes coming, including much more taxation of the wealthy.

China owns a substantial amount of US debt.
I wonder if they start calling it in if trump puts more tariffs on them.

—

China is not calling on us debt any time now, they need every penny of it, to print there own money, and what happends if they start of loading us dollar, renminbi will go up vs usd and that combined with tariffs will make things worse.
Here is some propaganda. It tells you real state of panic in prc.

The same sector that has long been a source of anxiety about China’s economic fate could also prove to be its temporary savior in the face of tariff pressure from the U.S., according to Nicole Wong, managing director for property research at CLSA.

Authorities are likely to encourage property prices, which are already rising, to increase further to help boost the economy, Wong told reporters Tuesday at the annual CLSA Investors’ Forum in Hong Kong.

“With this trade war going on, we think that the China property market policy would reverse because with a trade war there is this risk of losses of jobs in the unskilled category,” Wong said.

“And the property sector is a very good sort of replacement.” she added.

Anyone who thinks the rates will moderate and stop rising is not remembering that banks and lenders hold borrowers captive. Higher rates equals higher payments to them every month. If people default or get foreclosed on – more gravy to the lenders. So sad too bad!

I’m describing the events that will help stir up the biggest social and political protest since the 1960s, but much bigger and more effective.

In response, the changes that millennials will bring will tip over the entire status quo, because we will simply have no other choice. We control the ballot boxes already. We’re not gonna sit around and become even more precarious while the older generations abscond with everything.

That’s called democracy, btw. If you don’t like it Boomers, go try living in Thailand or Costa Rica like some of you talk about here. Just be prepared for what’s coming around the corner in those places.

Millennial Realist, you are overestimating your generation the same way the boomers overestimated their own. Ultimately, boomers put away the protest signs, gave up on the “revolution”, got jobs, had families, and settled down. Revolution gets really old really fast once you hit 30. Idealism takes a back seat to pragmatism. It’s part of the maturity process. Not even basement-dwelling Millennials are immune. Also, how many Millennials are really eager to have their own inheritances taxed away? I thought so.

#133 Millennial Realist on 09.17.18 at 3:31 pm
Be part of the change, or be run over by it.

Aren’t you the one being run over? – Garth

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Very cute, Garth, LOL.

I’m describing the events that will help stir up the biggest social and political protest since the 1960s, but much bigger and more effective.

In response, the changes that millennials will bring will tip over the entire status quo, because we will simply have no other choice. We control the ballot boxes already. We’re not gonna sit around and become even more precarious while the older generations abscond with everything.

That’s called democracy, btw. If you don’t like it Boomers, go try living in Thailand or Costa Rica like some of you talk about here. Just be prepared for what’s coming around the corner in those places.

“But then I just read in the comment section that Nine Eleven was a hoax”

“Maybe it’s time we all shut up.”
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You pull the cover off a hidden Tupperware container from the back of your fridge.

The food doesn’t look quite right, smells a little funky and you remember getting sick before eating old left over’s.

But then you recall a crazy new health trend you saw while watching the Dr. Oz show.

A biological ‘expert’ with a fancy CGI demo of the human stomach, tells you that the micro bacterial life form in that aged fridge container, will help improve your gut health and that it’s actually good for you.

Do you believe this Dr’s explanation and ideas?

Are you then comfortable, eating the furry little fridge treat?

Will it matter how many times the your told the same story, or how many different experts repeat the exact same info, until it becomes the excepted logic of the masses?

Or do you trust your own sight, smell and rational to decide that these expert’s are simply full of shit, regardless of how many misguided souls ‘believe’ this line of thinking?

This is 9/11 in a nutshell.

Some simply can not fathom the possibility they’ve been deceived to some degree by parties that were sworn to protect them. When confronted with certain potentially heinous realities, their mind trips into protection mode, defaulting to an outright denial of even glaringly obvious truths, all to protect the soft mental underbelly, that is, the average north american citizen.

After all, If we cant believe in:

Uncle Sam, Apple pie and Baseball….

What can we believe in?

PS: Question everything. Shutting up, is the last thing we should be doing. I’m supprised you suggest it Garth.

Hundreds of homeowners who bought homes built between 1983 and 2010 have reported that their concrete basements are collapsing. Officials have determined that the concrete contained too much of the mineral pyrrhotite. Insurance companies are refusing to cover the claims, leaving homeowners with over $200,000 in repair costs to jack up the house and replace the basement or accept that their home is dangerous, worthless and unsaleable. (Read the official investigative reports from the State of Connecticut here.) NBC News reported in October of last year that “State officials estimate up to 30,000 homeowners are affected by the problem.” What has been determined is that regulations governing quarries and concrete manufacturers were inadequate to detect the problem before the basements were constructed.

Hoi polloi in this kennel scoff at liberal arts degrees from Canadian universities (“certification monopolies”) like those held by our buff host. Hah! My daughter earned hers this past June and is at work in Downtown Cowtown as I write. Her boyfriend earned his a year ago and landed a job in a glass tower on 8th Ave in 4 weeks. Together they earn the Alberta median family income.

Meanwhile UofC engineering grads had an ~ 84% placement rate a few years ago. Now with the despairing fate of drillers for oil, gearheads are placed at about 47%. It is not the piece of paper you hang on your ego wall that counts. It is what you bring to the table and an ability to hustle.

Thanks for your post.
As you suggest, the 9/11 lie hides in plain sight. One only needs to unthink the story we’ve been told, and observe with one’s own eyes!

The 9/11 lie is perpetuated by the same psychological mechanism as religion – another myth many ascribe to. Religion is imprinted typically by parents, who have control over us.
Our brains are easily imprinted by messages from authority. By nature we are are cultist beasts – we surrender to authority easily. 9/11 was witnessed on TV, and TV news is a source of authority. Newspapers asserted the message, and they are a voice of authority.

Another example: Look how easily society accepts this preposterous idea that we should have a royal family, and that all the offspring from some random humans are therefore also ‘special’. New canadians must pledge lifelong loyalty to the queen and all future successors, including the unborn. What kind of BS is this? Yet, its entrenched in law and a challenged failed at the Supreme Court of Canada. Even our best judges can’t see the forest for the trees!

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The views expressed are those of the author, Garth Turner, a Raymond James Financial Advisor, and not necessarily those of Raymond James Ltd. It is provided as a general source of information only and should not be considered to be personal investment advice or a solicitation to buy or sell securities. Investors considering any investment should consult with their Investment Advisor to ensure that it is suitable for the investor's circumstances and risk tolerance before making any investment decision. The information contained in this blog was obtained from sources believed to be reliable, however, we cannot represent that it is accurate or complete. Raymond James Ltd. is a member of the Canadian Investor Protection Fund.